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February 14, 2011

ICAS favours Swiss banking supervision model

The Institute of Chartered Accountants of Scotland (ICAS) has advised the UK Financial Services Authority (FSA) and Bank of England to use the Swiss model as an example when shaping the relationship between auditor and banking supervisor.

The report is a response to the FSA and the Bank of England’s draft code of practice issued last week, written to help enhance dialogue between auditors and supervisors.

The ICAS research report The contrasting role of auditors in UK and Swiss banking supervision, suggests that in Switzerland auditors have a significant, direct role in banking supervision; compared to the UK where the role of auditors is limited.

The report said the responsibility for the file review of bank audit engagements in Switzerland is undertaken by a specialist unit within the Swiss banking regulator and the Financial Market Supervisory Authority. The reviews of other public interest companies are undertaken by the Swiss public oversight body, the Swiss Federal Audit Oversight Authority. 

ICAS said this approach enables specialist banking audit knowledge to be concentrated in a dedicated team at the regulator, also ensuring the audit approach and performance between and within audit firms is benchmarked. 

Deadline for comment on the FSA and Bank of England practice draft is 25 March.

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